are some tips on how to survive the process.
buyers will sooner or later come across a short sale. This
is an attempt by the owner to sell a home before the bank
takes it back through foreclosure. A short sale may salvage
their credit rating and lift the burden of the mortgage
debt. The short sale process hinges on the bank taking e
a loss now and approving the sale thereby eliminating the
process of foreclosing and reselling the home.
: Some information to be aware of about this process.
The Short Sale Price is set by the seller and their agent
& seller, not bank : The agent and seller will
usually create a very low asking price in order to attract
lots of buyers. They will do this to get so many buyers
that they can then do a Highest and Best offer with all
of them (and sometimes more than once) The bank is usually
not aware of the asking price, but does have final say in
what an acceptable offer will be. This process often takes
months and the seller will try to put you off long enough
to get an offer that is as high as possible.
Low offers usually get no or, at the most, a very slow response:
Since the bank is usually toldthe price, when low offers
come in the bank does often not even respond. It takes an
offer close to the bank's investment to get their attention.
Sometimes it is possible, by searching the public record
to determine how much a bank has in the property and, if
you do this research and, make on offer close it may get
the banks attention. More Below Search.
A good buyer's agent will check comparable's before submitting
an offer and share with you what the going price should
be for the home: The agent
will check recent home sales in the area to give buyers
a better idea of the price properties like the short sale
are selling for. This ammunition will be needed to help
convince the bank that the offered price is realistic.
Don't get emotional or financially tied up in the property
: Short sales are not usually short time frames
to purchase. It often, (usually) takes much longer to "earn"
a short sale than a regular sale. Do not expect to get any
one particular property. Since there will be many bidders
and the process will take a long time, you should keep looking
and trying to find a real deal in the regular market.The
reality of life today is that you will probably will find
a better deal in the general sales market before your short
sale is accepted.
Sellers with equity in other properties or or elsewhere
(like boats, cars, jewels, bank accounts, savings and etc)
will not qualify for a short sale and will be asked to pay
the difference. Some will change their minds: Sellers
that have equity anywhere else will be made to liquidate
it and pay down the mortgage before the bank will approve
a short sale. The seller might be asked to sign a promissory
note to pay back all or most of the debt. Sellers often
do not cooperate with this and bulk or try to hide the other
assets.A bank will not approve a short sale and take a loss
if it suspects equity is elsewhere. Thus one more reason
"Bank Approved Short Sales " prices are quickest to close
: Sometimes the bank approves a price for a short
sale in advance. They do not usually negotiate after this
price is approved. A lowball offer will not get anywhere
under these circumstances.
The bank decides on who the buyer will be .... not the seller.
The bank will pick the most appealing buyer, which
may mean different things to different banks. Some banks
may prefer buyers with larger down money. Some want the
Do not rely on an Inspection to get a discount! Repairs
are almost never done. Generally you are dealing with an
"as is" house.Sometimes there is a credit and
the buyer takes the responsibility of fixing anything.
When you get short sale approved, you must close on time
: Be prepared to close on the date the bank sets
or there will be penalties or the home will go to the next
short sale process can be a terror. We have seen buyers
in tears over this process and must warn you that it is
not often that it works out. Remember the bank usually can
just go to foreclosure and take possession of the home at
anytime. If this happens, the process is void and you would
usually have to start all over again with a different foreclosure